David Rubenstein: evaluation

Transcript context

…How would you contrast the skills of someone in private equity with the skills of someone in venture capital? Venture capital people are taking bets on entrepreneurs. You don’t really know. When Facebook showed up, everybody passed on it except Accel. It’s obvious now that Facebook was a great company, but why did everybody pass? Because they weren’t sure the concept worked. They weren’t sure that Mark Zuckerberg — dropped out of Harvard — was really appropriate to do this. I think venture capital is more of a bet on a concept, more of a bet on an entrepreneur, whereas private equity, you have six months, typically, to do the due diligence. You can project cash flows pretty readily because you have previous cash flows from which you can base your future cash flow projections. I would say it’s a little bit more scientific, in some respects, less of a crapshoot than venture capital is. Why did you decide not to meet with Mark Zuckerberg way back when?…

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